El Pollo Loco Moves Toward 'QSR Plus' Positioning

The El Pollo Loco grilled-chicken chain is ramping up growth with a new restaurant prototype and an emphasis on made-in-house quality that seeks to solidify the brand’s positioning as “quick-service plus.”

Costa Mesa, Calif.-based El Pollo Loco was hit hard during the recession, officials said, and in the past year roughly 14 restaurants closed, bringing the total to 398. In prior financial disclosures because of once-public debt, the private company reported a net loss of $38.6 million for the 12 months ended March 30, 2011, the end of the first quarter that year and the most recent report available.

In July 2011, El Pollo Loco and its parent company EPL Intermediate Inc., announced the completion of a refinancing of publicly traded bonds with private debt and an unspecified investment of capital from existing equity sponsors.

The refinancing paved the way for El Pollo Loco to work on revitalizing the brand, and 2012 has been a “year of transformation” that is paying off with transactions and guest checks now trending positive, said Mark Hardison, vice president of marketing.

In February, El Pollo Loco hired a new ad agency — Butler, Shine, Stern & Partners — and a new media campaign was launched in April with the theme “Crazy You Can Taste.”

The goal, said Hardison, was to highlight the fact that El Pollo Loco’s signature chicken is marinated and grilled in restaurants, and the made-fresh-in-house theme carries throughout the menu, from the guacamole to the salsa bar.

“That’s unusual in fast food, and we wanted to make sure we were on top of our game in that, and to take credit for it,” said Hardison. “The campaign is all about taking credit for the crazy lengths we go to [in order to] prepare high-quality food.”

Promoting freshness, value

Limited-time offers throughout the year have also helped boost sales, he added. Various $5 combination meals, such as an original Pollo Bowl served with tortillas and a small drink, have been popular, for example.

A Stuffed Quesadilla promotion in August, featuring new cheesy, protein-filled quesadillas with fresh-sliced avocado for $5.49 also did well and will return in various forms this year. Next year, it will be added as a permanent line on the menu.

In July, the chain offered a $20 three-course family meal featuring a nacho appetizer plate, eight pieces of chicken with rice and beans, tortillas and salsa, and four churros. That value-positioned three-course offer will return for the holidays, starting Nov. 20, with a sliced avocado salad appetizer, eight pieces of chicken, rice and beans, and an indulgent dessert of chocolate tortilla chips drizzled with chocolate and marshmallow sauces and dusted with powdered sugar — all for $20.

Hand-shredded beef will also be on the menu during the holidays as an LTO, featured in tacos, bowls and as a stuffed quesadilla for prices ranging from $2.79 to $5.49.

The presence of fresh-sliced avocado in dishes across the menu has also played a key role in conveying freshness, a move that was aided in part by favorable commodity pricing as a result of an abundant harvest.